OCT  23  !9tf> 


Stock  and  Bond  Valuation 

of  Public  Utilities 

in  California 


n  H  « 

\ 
OF  THOJ 

UN  IV  E  !«  51  ':"  ''       , 
OF 


Issued  by 

THE  STATE  TAX  COMMISSION 

SACRAMENTO,  CALIFORNIA 
OCTOBER  1,  1916 


CALIFORNIA   STATE  FEINTING  OFFICE 


25784 


PREFACE. 

October  1,  1916. 

We  issue  herewith  the  report  recently  made  to  this  Commission  by 
Prof.  Carl  C.  Plehn  on  the  stock  and  bond  values  of  the  properties 
of  public  utilities  of  California  as  of  March,  1916,  which  properties  are 
taxed  on  the  basis  of  gross  receipts.  The  final  figures  of  values  so 
established  will  form  a  basis  to  determine  the  rate  of  tax  borne  by 
public  utilities  on  each  one  hundred  dollars  of  value. 

Prior  to  this  the  Commission  opened  up  for  public  inspection  and 
criticism  appraisements  made  by  it  of  representative  parcels  of  general 
property  in  thirty-eight  counties  of  the  state.  These  appraisements 
will  form  a  basis  to  determine  the  true  value  of  property  assessed  for 
local  purposes  and,  finally,  the  rate  of  tax  borne  by  each  one  hundred 
dollars  of  value  of  said  property. 

At  the  conclusion  of  this  investigation,  it  is  obvious  that  a  compar- 
ison of  these  rates  will  show  the  relative  tax  burden  between  public 
utility  and  general  property. 

In  conformity  with  the  policy  we  have  heretofore  pursued  to  obtain 
all  the  knowledge  that  publicity  will  give  in  these  and  other  tax  matters, 
we  invite  inspection  and  criticism  of  the  stock  and  bond  values  set 
forth  herein.  Very  respectfully, 

STATE  TAX  COMMISSION! 


359055 


STOCK  AND  BOND  VALUATION  OF  PUBLIC  UTILITIES. 

l.y  Prof.  CARL  C.  PLEIIN. 

The  "stock  and  bond"  values  of  the  properties  of  those  public 
utilities  which  are  taxed  on  the  basis  of  their  gross  receipts,  excepting 
a  few  small  companies  which  could  not  be  so  valued,  together  with  the 
taxes  paid  and  the  ratio  of  the  taxes  to  those  values,  have  been  found 
to  be  as  follows : 


Companies 

Value                        Taxes 

Ratio, 
per  cent 

Railroad  companies  

$519,620,000        $6  789  063  34 

1  3065 

nd  electric  companies  _    __ 

224,902  300          2  438  576  64 

1  0838 

Telephone  and  telegraph  companies 

60,714,250            848,790  92 

1.3983 

Kxuress  companies     _    __ 

4  272,000  !            83  954  28 

1  9652 

Car  companies     -  _  _  _    __ 

11,665000             151295  02 

1  2970 

All  classes  $821,173,550      $10,311,680  20  l         1.2556 


The  meaning  of  a  "stock  and  bond"  valuation. 

The  values  in  the  foregoing  table  were  obtained,  as  stated,  by  the 
so-called  stock  and  bond  method.  This  consists  in : 

First,  ascertaining  the  aggregate  value  of  the  property  of  each 
company  by  multiplying  the  number  of  shares  of  stock  and  the  number 
of  the  bonds,  issued  and  outstanding,  by  the  market  values  of  the 
different  securities,  as  ascertained  from  quotations  upon  the  stock 
exchanges,  or  from  sales,  or  from  offers  to  purchase  the  securities. 
When  data  concerning  actual  sales,  or  offers  to  purchase,  were  not 
obtainable  the  value  of  a  given  stock  or  bond  was  ascertained  or  fixed 
by  capitalizing  the  dividends,  or  profits,  which  the  stock  was  earning, 
or,  Jn  the  cases  of  bonds,  the  interest  being  earned ;  or,  more  generally 
stated,  by  reference  to  the  earnings  of  the  company,  due  regard  being 
had  to  the  safety  of  the  security  as  an  investment. 

As  this  process  gives  the  value  of  all  the  holdings  of  the  company, 
including  nonoperative  property  otherwise  taxed,  investments  and  the 
like  not  covered  by  the  taxes  on  the  gross  receipts,  it  was  necessary: 

Second,  in  order  to  arrive  at  the  value  of  the  property  covered  by 
the  gross  receipts  tax,  to  deduct  from  the  aggregate  value  of  the  secur- 
ities, found:  (1)  the  value  of  any  nonoperative  property,  within  the 
meaning  of  the  tax  law;  (2)  the  value  of  any  nontaxable  property, 
or  securities  held;  (3)  the  value  of  any  intercorporate  holdings  repre- 
senting property  taxed  otherwise;  and  (4)  the  value  of  property  outside 
the  state. 
2—25784 


Intestate 

In  this  investigation  interstate  properties  have  first  been  valued  as 
a  whole,  covering  that  part  outside  as  well  as  that  part  inside  the  state. 
Then, .the  nonoperative  and  other  proper  deductions  having  been  made, 
the  remainder  has  been  divided  between  the  state  and  outside  in  the 
same  proportions  as  were  the  taxable  gross  receipts  inside  and  the  gross 
receipts  outside  of  the  state.  Thus,  for  example,  the  value  of  the 
Southern  Pacific  system  as  a  whole,  less  nonoperative  property,  was 
found  to  be  $577,600,000.  Forty-four  and  three-tenths  per  cent  of  the 
total  business  of  the  system  is  done  in  California.  Hence,  the  value 
of  that  company's  property  in  California  was  taken  to  be  44.3  per  cent 
of  $577,600,000,  or  $255,876,000. 

The  extent  to  which  -quotations  were  obtained. 

In  the  case  of  all  the  large  companies,  and  of  many  of  those  rela- 
tively small,  actual  quotations  were  obtained  for  all  the  more  import- 
ant issues  of  securities.  Thus,  out  of  the  total  of  the  values  arrived 
at  for  the  railroads,  ninety-two  per  cent  were  based  primarily  on 
quotations.  Similarly,  for  the  gas  and  electric  group,  ninety-four  per 
cent  of  the  values  are  based  primarily  on  quotations;  and  for  the 
telephone  and  telegraph  group  ninety-two  per  cent, 

The  sources  of  the  quotations. 

The  quotations  were  obtained  from  the  official  reports  of  the  San 
Francisco  and  Los  Angeles  stock  exchanges,  from  sales  published  for 
each  business  day  in  the  San  Francisco  journal  known  as  Finance  and 
Trade  and  from  the  weekly  issues  and  monthly  quotation  supplements 
of  the  New  York  Commercial  and  Financial  Chronicle. 

The  averages. 

The  prices  used  were  the  averages  for  the  fifteen  months  from  Jan- 
uary 1,  1915,  to  March  31,  1916.  This  period  was  chosen  because 
the  stock  exchange  in  New  York  was  closed  for  six  months  preceding 
December  15,  1914,  on  account  of  the  war,  and  there  were,  therefore, 
only  fifteen  months  consecutive  quotations  available  prior  to  April  1, 
1916,  when  this  work  was  begun.  Each  month's  quotations  were  aver- 
aged separately,  and  then  the  average  of  the  fifteen  monthly  quotations 
wras  taken.* 

Valuations  by  analogy. 

In  the  case  of  the  smaller  issues  of  securities  which  were  not  quoted, 
but  were  issued  by  companies  which  had  securities  outstanding  that 


*A  rough  indication  of  the  amount  of  work  involved  is   afforded  by  the   fact  that 
about   30,000   quotations  and  over  25,000   sales  were  tabulated  and  averaged. 


were  quoted,  it  was  possible  to  compute  the  price  of  the  small  issues 
by  analogy.  Thus,  for  example,  the  Pacific  Gas  and  Electric  Com- 
pany, most  of  whose  securities  are  quoted,  has  outstanding  an  issue 
of  bonds,  known  as  the  Blue  Lakes  Water  Company's  six  per  cents, 
due  in  1938,  which  are  not  quoted.  It  was  found  that  other  bonds  of 
this  company  of  similar  seniority  and  security  were  quoted  as  selling 
011  a  five  per  cent  basis.  By  a  bond  table  it  was  found  that  a  six  per 
cent  bond  with  twenty-two  years  to  run  would  yield  five  per  cent  if 
bouuht  at  113  per  cent.  Hence  those  bonds  were  set  down  as  if  quoted 
at  113  per  cent. 

Capitalizing  earnings. 

In  the  case  of  a  security  which  was  not  on  the  market,  and  whose 
value  could  not  be  ascertained  by  analogy,  it  was  necessary  to  capital- 
ize the  earnings  which  belonged  to  that  security.  Thus,  for  example, 
a  given  company  whose  stock  was  not  on  the  market  was  found  to  be 
earning,  say,  $1,000,000  a  year,  over  and  above  operating  expenses. 
Of  this  million  dollars,  $750,000  went  to  pay  interest  on  the  bonds  and 
taxes,  leaving  $250,000,  wilich  techinally  belonged  to  the  stockholders. 
But  out  of  this  $250,000  wre  find,  perhaps,  that,  under  orders  of  the 
Kailroad  Commission,  $100,000  must  be  set  aside  for  depreciation, 
sinking  funds,  and  other  purposes  deemed  necessary  to  protect  the 
bondholders  and  to  ensure,  to  the  public,  good  and  continuous  service. 
There  would  thus  be  only  $150,000  a  year  going  to  the  stockholders 
outright,  which  they  may  use  as  they  see  fit.  If  this  net  income  of 
$150,000  is  fairly  safe  and  sure,  we  have  assumed  that  it  should  be 
capitalized  at  eight  per  cent,  which  seems  to  be  about  what  the  Kail- 
road  Commission  uses  in  its  computations  in  similar  cases,  and  what 
the  market  requires  to  keep  such  a  security  at  par.  For  bonds,  of 
course,  the  rate  is  lower.  If  the  business  of  a  company  was  hazardous, 
the  earnings  have  been  capitalized  at  higher  rates,  proportionate  to 
the  risk.  But  such  cases  were  few  in  number. 

While  the  foregoing  assumptions  as  to  the  proper  rate  to  use  in 
capitalizing  earnings  are  obviously  debatable,  they  seem  to  be  as 
reasonable  as  any,  and  it  may  be  further  pointed  out  that  any  error 
involved  in  the  use  of  such  assumptions  would  be  so  small  in  itself, 
and  would  affect  so  small  a  part  of  the  total  valuations,  as  to  be 
negligible.  The  error,  if  there  be  one,  would  affect  our  ratios  in  the 
fourth  decimal  place  only,  even  if  it  were  as  large  in  the  first  instance 
as  twenty-five  per  cent. 


Special  reports  on  prices, 

In  some  cases  the  companies  have  reported  private  sales  of  stocks 
or  of  bonds  not  publicly  quoted,  and  this  information  has  been  used 
to  supplement  our  quotations.  In  other  cases  the  companies  have 
reported  their  estimates  of  what  the  securities  should  sell  for.  If  these 
were  sustained  by  the  income  they  have  been  accepted. 

Sources  of  information  on  company  accounts. 

The  data  as  to  the  amount  of  the  stocks  and  bonds  outstanding,  and 
as  to  gross  receipts,  net  earnings  and  the  like,  were  taken  from  the 
reports  required  by  law  to  be  filed  with  the  State  Board  of  Equaliza- 
tion. To  guard  against  possible  errors,  lack  of  uniformity  and  the 
like,  these  reports  were  checked  by  the  reports  published  in  Poor's 
Manual  of  Railroads  and  Manual  of  Public  Utilities,  and  by  the  reports 
filed  with  the  State  Railroad  Commission. 

Values  other  than  stock  and  bond  values. 

In  a  relatively  small  number  of  cases  resort  was  had  to  some  other 
basis  than  a  strict  stock  and  bond  value.  Thus,  for  example,  the  Death 
Valley  Railroad,  built  by  a  borax  company  primarily  to  reach  its 
deposits,  was  taken  at  its  book  value,  in  view  of  the  fact  that  it  has 
been  built  under  the  general  supervision  of  the  Railroad  Commission 
and  there  seemed  to  be  every  reason  to  believe  that  its  book  value 
corresponded  closely  to  its  true  value.  Again,  in  the  case  of  the 
Western  Pacific  we  accepted  the  finding  of  the  court,  which  placed 
the  aggregate  value  at  $18,000,000.  We  did  not  feel  inclined  to  place 
our  personal  opinion  in  opposition  to  the  decision  of  so  august  a 
tribunal.  Moreover,  it  so  happened,  that  a  stock  and  bond  value 
would  give  a  result  only  a  quarter  of  a  million  higher  than  that  arrived 
at  by  the  court. 

Deductions  for  nonoperative  property. 

The  determination  of  the  amount  and  value  of  the  deductions  for 
nonoperative  and  similar  property  or  holdings  presented  special  diffi- 
culties and  each  case  had  to  be  studied  on  its  own  merits.  Many  sug- 
gestions for  general  rules  were  submitted  by  tax  agents,  such  as  using 
a  fixed  multiple  of  the  assessed  values.  But  none  of  these  suggestions 
were  found  to  be  feasible.  In  this  part  of  the  work,  however,  great 
assistance  was  obtained  from  the  complete  and  detailed  reports  on  file 
with  the  Railroad  Commission.  Special  thanks  are  due  to  Messrs.  Sins- 
heimer,  Reynolds  and  White  of  that  commission's  staff  for  courtesies 
extended  in  this  connection.  The  decisions  of  the  Railroad  Commis- 
sion, its  orders,  investigations  and  valuations  were  constantly  referred 
to  and  used  in  so  far  as  they  served  to  throw  light  upon  our  problems. 


Bankrupt  companies. 

Companies  in  the  hands  of  receivers  or  undertaking  refinancing 
presented,  on  the  whole,  less  difficulties  than  were  anticipated.  The 
conditions  of  the  investment  market  at  the  present  time  are  such  as 
to  give  a  very  fair  indication  of  the  value  of  such  of  the  securities  of 
companies  in  that  condition  as  have  any  value  at  all.  Only  in  one 
case,  namely,  that  of  the  Ocean  Shore  Railroad,  did  the  difficulties 
prove  to  be  such  that  the  valuation  had  to  be  given  up. 

Companies  omitted. 

There  are,  of  course,  a  number  of  small  companies  to  which  a  stock 
and  bond  method  of  valuation  will  not  apply.  Some  of  these  are  not 
incorporated  and  are  "companies"  only  in  the  technical  sense  in  which 
the  tax  law  defines  companies.  Others  are  operating  as  public  utilities 
only  incidentally,  in  connection  with  some  other  business  more  import- 
ant to  them.  Thus,  a  mining  company  develops  power  for  its  own 
use  and  sells  some  for  lighting  purposes  to  a  neighboring  village. 
There  are,  also,  a  variety  of  other  reasons  why  companies  had  to  be 
omitted.  The  omission  of  these  companies  was  necessary  because  their 
inclusion  would  have  improperly  disturbed  the  averages,  slightly,  per- 
haps, but  to  some  extent,  at  least.  Among  the  telephone  companies 
in  particular  there  are  a  large  number  of  small  companies  for  which 
no  valuation  was  attempted.  Many  of  these  are  farmers'  mutuals, 
some  utilizing  wire  fences  as  the  means  of  communication.  These 
depend  upon  assessments  for  the  necessary  expenses  of  upkeep  and 
can  have  no  commercial  value  in  any  proper  sense. 

Special  cases.     A.     United  Railroads. 

There  are  a  few  special  cases  which  need  mention.  Among  these 
that  of  the  United  Railroads  of  San  Francisco  is  the  most  important, 
on  account  of  its  size.  This  company  presented  special  difficulties. 
In  the  first  place,  the  control  of  the  company's  finances  is  very  com- 
plex. It  is  controlled  through  two  finance  companies,  which  are  in 
turn  related  to  one  another.  One  of  these  is  the  United  Railways 
Investment  Company  of  New  Jersey,  and  the  other  is  the  California 
Railway  and  Power  Company.  These  companies  control  the  United 
Railroads  of  San  Francisco  through  ownership  of  stock.  But  besides 
owning  the  stock  of  the  United  Railroads,  each  of  these  companies  is 
the  owner  of  the  stock  and  securities  of  other  companies.  Some  of 
these  other  companies  own  properties  located  in  the  East.  Thus,  the 
United  Railways  Investment  Company  owns  properties  located  in  Pitts- 


—  10  — 

burg,  Penn.,  and  the  California  Railway  and  Power  Company  owns  the 
stock  of  two  power  companies  in  California,  as  well  as  its  interests 
in  the  United  Railroads.  Quotations  can  be  had  of  some  of  the  stocks 
of  each  of  the  two  financing  companies,  but  no  one  can  tell  exactly 
how  much  of  the  value  of  those  stocks  is  due  to  the  interest  they  repre- 
sent in  the  United  Railroads,  or  whether,  in  fact,  that  interest  is  more 
a  liability  than  an  asset.  To  segregate  out  the  values  by  an  analysis 
of  the  two  financing  companies  would  involve  the  use  of  assumptions 
upon  wrhich  it  is  hardly  possible  that  any  two  persons  would  agree.* 

Another  difficulty  arises  from  the  fact  that  the  principal  franchises 
under  which  the  United  Railroads  uses  the  streets  of  San  Francisco 
are  soon  to  expire.  The  vital  ones  expire  in  from  eleven  to  twelve 
years.  It  is  impossible  to  foresee  what  will  happen  to  the  company 
at  the  end  of  that  time.  It  may  be  that  the  city  will  renew  the  fran- 
chises ;  it  may  be  that  the  United  Railroads  system  will  become  a  part 
of  the  municipal  railway.  These  uncertainties  are  reflected  in  the 
market  price  of  the  bonds. 

The  outstanding  bonds  and  notes  of-  the  United  Railroads,  for  which 
a  direct  valuation  by  quotations  can  be  had,  were  worth  on  the  average 
for  the  fifteen  months,  in  round  numbers,  $25,250,000.  The  prices 
have  varied  greatly  during  the  fifteen  months.  It  is  claimed  that  since 
the  larger  issues  of  bonds  were  selling  early  in  July  as  low  as  $30  on 
the  hundred  that  the  bonds  at  that  figure  represent  all  the  value  there 
is  to  this  company's  property.  But  on  careful  analysis  the  case  does 
not  appear  to  be  so  bad  as  this.  There  is  an  annual  surplus  avail- 
able for  dividends  or  betterments  after  paying  all  interest  and  taxes, 
including  also  the  depreciation  charge  of  $550,000  per  annum  which 
the  railroad  commission  has  recently  required.  This  surplus  amounts 
to  something  like  $350,000.  If,  in  view  of  the  uncertainty  of  the  life 
of  the  company,  we  capitalize  this  at  the  high  rate  of  twelve  per  cent, 
it  would  be  worth  $3,000,000.  There  is  also  the  possibility  of  some 
salvage  on  cars  and  the  like  in  case  of  the  dissolution  of  the  company. 
There  is,  further,  some  value  in  the  minor  franchises  which  have  a 
longer  time  to  run. 

It  appears  that  the  United  Railroads  is  practically  certain  to  earn, 
over  and  above  operating  expenses,  about  $3,000,000  a  year  for  the 
next  twelve  years.  The  present  value  of  $3,000,000  a  year  for'^twelve 
years  at  six  per  cent  is  a  little  over  $25,000,000,  or  almost  exactly  the 
market  value  of  the  bonds.  It  seems  clear,  then,  that  this  is  the  mini- 
mum value  of  the  property.  In  fixing  the  value  at  $29,700,000,  AVC 


*The  foregoing  statement  was  written  before  the  announcement  in  the  public  press 
of  the  plans  for  reorganization,  July   23,   1916. 


— 11  — 

have  taken  into  consideration  all  the  factors  involved  and  while  it  is, 
in  part,  admittedly  an  estimate,  it  is  believed  that  the  result  is  as  c 
to  the  present  value  as  can  be  found.* 

Special  cases.     B.    Large  electric  companies. 

All  the  large  electric  power  companies,  but  notably  the  Great  Wes1 
ern  Power    the  Pacific  Gas  and  Electric  Company,  the  Pacific  Light 
and  Power  Company  and  the  Southern  California  Edison,  show  rela- 
tively low  ratios  of  taxes  to  values,  and  being  so  large  are  the  mam 
cause  of  the  low  ratio  of  taxes  to  value  shown  by  that  group, 
reason  for  this  seems  to  be  that  those  companies  are  still,  to  a  large 
extent   in  the  development  stage  and  the  market  value  of  the  securities 
is  high  for  the  present  earnings.     All  of  these  companies  have  plants 
which  have  cost  a  lot  of  money,  but  which  are  not  yet  working  to  their 
full  capacity.     The  investor  evidently  believes  that  the  future  of  these 
companies  is  brilliant,     This  is  the  only  explanation  possible  for  the 
fact  that  the  securities  of  these   companies  were  selling  on  about  a 
five  and  one-half  per  cent  basis  in  the  same  markets  in  which  one  can 
buy  good  railroad  bonds  that  will  yield  him  from  six  to  six  and  one- 
half  per  cent, 

These  electric  companies  show,  also,  a  low  expense  ratio  and 
quently  a  high  ratio  of  net  to  gross.  This  makes  it  possible  to  support 
more  capital  for  each  one  hundred  dollars  of  gross  receipts  than  is 
the  case  with  other  classes  of  companies  which  have  a  higher  expense 
ratio.  It  appears,  however,  that  as  companies  of  this  sort  grow  older, 
utilize  their  plants  more  nearly  to  capacity,  and  as  the  plants  grow 
older,  this  condition  passes  away.  It  may,  therefore,  probably  be 
assumed  with  safety  that  the  low  ratio  of  taxes  to  value  is  a  passing 
feature  with  these  companies.  As  an  example  of  the  change  which 
comes  with  time,  it  may  be  pointed  out  that  the  ratio  of  taxes  to  value 
for  the  Great  Western  Power  was  0.2684  per  cent  in  1912  and  in  1916 
is  found  to  be  1.0869  per  cent. 

The  uniformity  in  the  results. 

One  striking  feature  of  the  results  of  this  investigation,  as  compared 
with  the  similar  investigation  made  under  the  auspices  of  the  State 
Board  of  Equalization  in  1912,  is  the  greater  uniformity  in  the  ratios 
for  the  different  companies  in  the  same  group.  Thus  the  lowest  tax 
ratio  for  railroads  is  0.9205  per  cent  and  the  highest,  if  we  except 
certain  cases  that  are  obviously  anomalies,  is  1.6937  per  cent;  the 

this  valuation   was  determined  upon   and  reported  to   the   State  ^Tax  CJom- 


value  as  of  March,   1916. 


—  12  — 

difference  between  the  highest  and  the  lowest  is  about  0.7  per  cent, 
while  in  1912  the  range  was  from  0.3417  per  cent  to  1.6588  per  cent, 
the  difference  being  1.2  per  cent.  In  the  same  way,  the  range  for 
the  gas  and  electric  group  is  from  0.9731  per  cent  to  1.7148  per  cent, 
a  difference  of  0.7  per  cent,  as  against  a  range  from  0.3089  per  cent  to 
4.4112  per  cent  in  1912,  with  a  difference  of  4.1  per  cent.  The  same 
thing  is  true  of  the  telephone  and  telegraph  companies,  whose  ratios 
show  a  range  from  1.0250  per  cent  to  1.6758  per  cent,  a  difference  of 
0.65  per  cent,  as  against  a  range  in  1912  from  0.6286  per  cent  to  2.5014 
per  cent,  a  difference  of  1.9  per  cent. 

The  reasons  for  the  greater  uniformity  found  seem  to  be  two.  First, 
we  have  the  work  and  influence  of  the  railroad  commission  in  the 
direction  of  uniformity  and  accuracy  of  accounting.  The  accounts 
now  show  more  nearly  the  true  state  of  affairs  than  they  did  in  1912. 
The  change  is  illustrated  by  Decision  No.  2397  of  that  commission,  in 
which  exception  was  taken  to  the  setting  up  of  a  "surplus"  by  the 
United  Railroads  of  $1,200,000  to  take  the  place  of  like  amount  of 
stock  canceled,  despite  the  fact  that  the  stock  canceled  had  very  little 
real  value.  Many  such  fictitious  items,  formerly  carried  under  the 
theory  that  they  were  necessary  in  order  to  make  the  books  balance, 
have  been  eliminated  from  the  accounts  by  the  railroad  commission, 
and  as  a  result  it  is  more  feasible  to  arrive  at  the  true  values  behind 
the  figures  than  it  was  in  1912. 

Second,  the  state  of  the  investment  market  is  such  that  the  investor 
is  more  cautious  than  he  used  to  be  and  he  demands  a  clear  showing 
of  sound  values.  He  has,  moreover,  better  opportunities  than  ever 
before,  of  getting  information  as  to  the  facts  that  lie  behind  the  glow- 
ing prospectuses  sometimes  published.  It  appears  now  that  there  was 
some  "water"  in  the  values  of  the  companies  as  found  by  the  quota- 
tions of  the  stocks  in  1912. 

Small  versus  large  companies. 

In  1912  it  appeared,  generally  speaking,  that  the  gross  receipts  tax 
imposed  a  heavier  burden  on  the  small  companies  than  on  the  large. 
If  that  were  ever  true,  'and  it  now  seems  more  than  likely  that  the 
showing  was  misleading,  resulting  from  the  causes  just  discussed,  it 
is  no  longer  true  today. 

The  effect  of  the  high  interest  rates. 

The  rate  of  interest,  that  is,  the  cost  of  money,  was  higher  during 
the  fifteen  months  included  than  it  was  in  1912,  and  consequently  one 
would  expect  to  find  the  prices  of  securities  lower.  How  much  this 
has  affected  our  figures  it  is  not  possible  to  say,  because  the  under- 
lying properties  have  changed  also  in  the  interval.  A  comparison  of 


—  13  — 

some  of  these  securities  representing  properties  that  have  not  changed 
much  seems  to  show  a  drop  in  prices  of  from  three  to  four  per  cent. 
Thus,  for  example,  the  stock  of  the  Santa  Fe  was  rated  in  the  investi- 
gation of  1912  at  101,  and  in  the  present  investigation  shows  an 
average  price  of  97.6.  The  aggregate  value  of  the  property  of  the 
Santa  Fe  in  California  has  shrunk  from  $88,900,000  in  1912  to  $80,- 
500,000  in  1916,  while  that  of  the  Southern  Pacific  has  also  fallen  from 
$289,900,000  to  $255,900,000.  This  shinkage  is  not  all  due  to  the  fall 
in  the  prices  of  the  securities.  It  is  due  in  part  also  to  the  diversion 
of  traffic  by  the  Panama  canal,  which,  together  with  other  causes  such 
as  the  growth  of  population  in  the  Rocky  Mountain  states,  has  lessened 
the  proportion  of  the  total  business  of  these  companies  which  is  done 
in  California.  Thus,  in  1912,  16.7  per  cent  of  all  the  business  of  the 
Santa  Fe  was  done  in  California,  now  it  is  only  15.6  per  cent;  while  I 
that  of  the  Southern  Pacific  was  48.7  per  cent  Californiari  in  1912  and  ; 
is  now  only  44.3  per  cent. 

The  inequalities  in  the  tax  rates. 

It  was  the  intent  of  the  legislature  in  1915,  when  it  last  readjusted 
the  rates  of  the  gross  receipts  taxes,  to  impose  on  all  classes  of  com- 
panies a  tax  that  should  be,  as  nearly  as  possible,  equal  to  1.25  per 
cent  of  the  value  of  the  property  used.  In  so  far  as  the  stock  and 
bond  value  is  at  all  an  indication  of  the  values  of  the  properties  used, 
it  would  appear  from  the  table  at  the  beginning  that  this  intent  was 
realized  on  the  average  for  all  companies,  but  that  in  no  one  class 
was  it  exactly  reached.  By  that  standard  the  railroads  are  five  one- 
hundredths  of  one  per  cent  too  high,  the  gas  and  electric  companies 
are  low,  but  that  may  be  attributed  to  the  special  factors  discussed 
above.  The  rates  on  the  telephone  and  telegraph  companies  are  higher 
than  it  was  intended  to  make  them  by  nearly  fifteen  one-hundredths 
of  one  per  cent,  those  on  the  express  companies  very  much  higher  still, 
namely,  too  high  by  nearly  three-fourths  of  one  per  cent,  and  those  on 
the  car  companies  are  the  nearest  to  the  intended  tax. 

The  heavy  tax  on  express  companies. 

With  regard  to  the  express  companies,  the  reason  why  the  tax  ratio 
is  so  high  is  well  known.  Those  companies  are  suffering  from  the 
competition  of  the  parcels  post  and  have  not  yet  recovered  from  the 
reduction  of  their  rates  of  service  by  the  interstate  commerce  commis- 
sion and  the  state  railroad  commission.  The  tax  rate  fixed  before  these 
i-jnisos  had  reduced  the  values  of  the  stocks  should  now  be  readjusted 
to  meet  the  new  conditions. 


—  14  — 

Street  railway  taxes. 

With  regard  to  groups  within  the  main  groups  it  is  necessary  to 
make  a  brief  comment  on  the  street  and  electric  railways  generally. 
These  companies  in  California  are  at  present  laboring  under  diffi- 
culties. Not  only  has  automobile  competition  destroyed  the  hopes  of 
rapid  growth  of  revenues  that  were  once  entertained,  but  many  of 
them  are  laboring  under  a  load  of  bond  interest  that  is  too  great  to 
carry.  Since  this  condition  has  been  publicly  laid  to  the  door  of 
alleged  excessive  taxation,  it  is  proper  for  us  to  comment  on  it.  Thus 
the  committee  on  the  reorganization  of  the  San  Francisco-Oakland 
Terminal  Railways  (the  Key  Route  system,  with  allied  street  railways) 
says  in  its  circular : 

"Street  railway  companies  in  California  must  be  relieved  from 
the  present  excessive  burden  of  taxation.  These  companies  are 
required  to  pay  to  the  state  a  direct  tax  amounting  to  5}  per  cent 
of  gross  earnings.  This  tax.  however,  does  not  relieve  them  from 
the  obligations  of  their  local  franchises,  which  usually  require  ji 
payment  to  the  municipality  issuing  the  franchise  amounting  to 
2  per  cent  of  the  gross  earnings,  plus  an  obligation  to  do  street 
.  paving  which  under  existing  standards,  absorbs  approximately 
5  per  cent  of  the  gross  earnings.  *:  *  *  This  is  a  burden  which 
a  street  railway  company  operating  under  a  five  cent  fare,  with 
universal  transfers  and  paying  present  day  rates  of  wages  and 
prices  for  materials,  cannot  meet  except  possibly  under  unusual 
conditions  which  do  not  exist  in  this  case." 

In  answer  to  this  it  may  be  pointed  out  that  while  some  of  the  street 
railways  do  show  a  higher  ratio  of  taxes  to  value  than  some  of  the 
other  companies,  the  difference  is  not  great  enough  to  be  destructive 
and  is  due  to  the  fact  that  the  stock  and  bond  values  are  lowr  on 
'account  of  the  financial  difficulties  cf  those  companies,  difficulties  that 
originated  in  bad  methods  of  finance.  The  statement  is  particularly 
unfair  in  that  it  adds  to  the  taxes  proper  certain  payments  that  are 
not  taxes.  The  payments  under  the  franchises  are  strictly  rentals  for 
the  streets,  public  property  leased  to  the  companies,  and  the  repairs 
are  such  as  are  commonly  required  from  every  tenant  of  leased  prop- 
erty. But  whatever  the  cause,  the  fact  remains  that  every  enterprise 
must  pay  taxes  and  should  bear  a  burden  as  nearly  as  may  be  equal 
to  that  borne  lay  the  general  run  of  taxpayers. 

The  limitations  of  the  stock  and  bond  valuation. 

The  stock  arid  bond  method  of  valuing  public  utilities  gives  a  result 
which  has  a  definite  and  a  single  meaning,  and  which  must  be  used 
within  the  limits  of  that  meaning.  It  should  not  be  taken  to  mean 
something  different,  nor  something  more  or  less  than  it  does  mean. 


It  expresses  the  value  of  the  public  utility  as  a  unit  and  as  a  going 
concern,  with  reference,  .primarily,  to  its  present  earnings  and  to 
expected  future  earnings,  and  also  to  the  character  of  its  plant  and 
of  its  management.  It  is  the  value  as  determined  primarily  by  the 
investors  who  own  its  securities. 

Other  methods  of  valuation  of  public  utilities  Avill  give  different 
results,  each  of  which  has  likewise  its  own  peculiar  significance.  Other 
methods  that  have  been  used  are  based  either  on  the  capitalization  of 
the  net  earnings  or  on  some  appraisement  of  the  physical  and  fran- 
chise properties. 

The  use  of  round  numbers. 

The  following  tables  set  forth  in  detail  the  results  of  the  investiga- 
tion. It  will  be  noted  that  the  values  are  given  in  round  numbers. 
The  computations  were  carried  out  in  detail  down  to  the  last  dollar. 
But  in  tabulating  the  results  the  figures  were  taken  to  the  nearest 
thousand,  except  in  the  case  of  very  small  companies  where  the  drop- 
ping of  the  hundreds  would  have  made  a  proportionately  large  dif- 
ference in  the  result.  It  is  held  that  to  carry  the  hundreds,  tens  and 
units  in  estimates  running  into  the  millions  lends  only  a  specious 
appearance  of  accuracy  to  estimates  that  are  not  in  their  nature  accu- 
rate in  such  detail.  The  use  of  round  numbers  does  not,  however, 
mean  that  the  estimates  were  not  made  writh  all  possible  care. 

Data  on  file. 

Copies  of  the  original  reports,  all  the  quotations  collected,  all  other 
data  used,  the  correspondence  with  tax  agents  and  with  the  companies, 
all  the  original  tabulations  and  computations  made  in  preparing  this 
part  of  the  report  are  on  file  in  the  office  of  the  Tax  Commission. 


—  16  — 

RAILROAD    AND    STREET    RAILWAY    COMPANIES. 

Stock  and  Bond  Valuation  of  Properties  in  California  and  Ratio  of  Taxes  Thereto. 
(Excluding  certain  companies  to  which  that  method  of  valuation  can  not  be  applied.) 


Company 

Value 

Tax 

Ratio, 
per  cent 

Amador  Central  Railroad  Co. 

$392,000 

$4,596  00 

1.1724 

Arcata  and  Mad  River  Railroad  Co. 

422,000 

4,689  68 

.1113 

Atchison,  Topeka  and  Santa  Fe  Ry.  Co  

Bay  Point  and  Clayton  Railroad  Co.  _  __ 

80,547,000 
150,000 

1,015,395  14 
1,661  34 

1.2606 
.1075 

Boca  and  Loyalton  Railroad  Co 

123000 

1,678  82 

1.3648 

Bucksport  and  Elk  River  Railroad  Co. 

40000 

466  56 

1.1414 

California  Street  Cable  Railroad  Co 

1  300  000 

23,562  52 

1.8097 

California  Western  Railroad  and  Naviga- 
tion  Co 

1,103,000 

12,734  52 

1.1545 

Camino,  Placerville  and  Lake  Tahoe  Rail- 
road Co.              _      _      _      _      _______ 

45,000  i 

483  32 

1.0740 

Cement,  Tolenas   and  Tidewater  Railroad 
Co. 

256,000 

3,223  56 

1.2592 

Central  California  Traction  Co. 

1,105,000 

14,661  78 

1.3268 

Death  Valley  Railroad  Co. 

366,000 

5,289  80 

1.4453 

Diamond  and  Caldor  Railway  Co 

272,000 

3,368  06 

1.2382 

Fresno  Traction  Co.      _      _      _       .      _ 

808,000 

11,960  38 

1.4802 

Holton  Interurban  Railway  Co, 

200,000 

3,357  20 

1.6786 

Lake  Tahoe  Railway  and  Transportation 
Co 

150,000 

2,071  44 

1.3810 

Los  Angeles  and  San  Diego  Beach  Ry.  Co.__ 
Los  Angeles  Railway  Corporation  _  

375,000 
24,495,000 

4,085  50 
319,272  76 

1.0894 
1.3045 

McCloud  River  Railroad  Co.      _         __    __  _ 

1,200,000 

15,473  12 

1.2894 

Monterey  and  Pacific  Grove  Railway  Co  — 
Mt.  Tamalpais  and  Muir  Woods  Railroad 
Co 

97,000 
258,000 

1,721  22 
9,363  08 

1.7744 
:::3.6291 

Nevada,  California  and  Oregon  Railway  Co. 
Nevada  County  Narrow  Gauge  Railroad  Co. 
Nevada  County  Traction  Co.      _             _    __ 

1,336,000 
450,000 
120,000 

17,386  80 
7,369  08 
1,426  30' 

1.3014 
1.6375 
1.1886 

Northern  Electric  Railway  Co. 

3,960,000 

41,532  58 

•     1.0488 

Northwestern  Pacific  Railroad  Co. 

17,367,000 

209,081  96 

1.2039 

Oakland,  Antioch  and  Eastern  Railway  Co._ 
Pacific  Coast  Railway  Co 

1,800,000 
808,000 

31,558  70 
10,656  02 

1.7532 

1.3188 

Pacific  Electric  Railway  Co.      _  -__ 

35,800,000 

461,310  50 

1.2886 

Pajaro  Valley  Consolidated  Railroad  Co.__ 
Peninsular  Railway   Co. 

550,000 
1,600,000 

5,177  84 
15,033  22 

0.9414 
0.9395 

Petaluma  and  Santa  Rosa  Railway  Co  
Quincy  Western  Railway  Co.  _  _      _    _  _ 

720,000 
65,000 

8,507  22 
784  56 

1.1816 
1.2070 

Riverside,  Rialto  and  Pacific  Railroad  Co._ 
San  Diego  Electric  Railway  Co. 

212,000 
4,400,CCO 

3,590  72 
54,536  78 

1.6937 
1.2395 

San  Francisco,  Napa   and  Calistoga  Rail- 
way Co 

1,070,000 

11,911  40 

1.1132 

San  Francisco-Oakland  Terminal  Railways 
San  Jose  Railroads  Co.  _ 

18,085,000 
1,560,000' 

242,372  86 
17,664  86 

1.3402 
1.1323 

San    Pedro,    Los    Angeles    and    Salt    Lake 
Railroad  Co. 

13,290,000 

190,175  22 

1.4309 

Santa  Barbara  Suburban  Railway  Co. 

310,000 

4,095  52 

1.3211 

Santa  Maria  Valley  Railroad  Co. 

340,000 

4,819  68 

1.4175 

Sierra  Railway  Co 

1,490,000 

17,021  24 

1.1423 

Southern  Pacific  Co.    __    __      •  

255,876,000 

3,313,633  24 

1.2950 

South  San  Francisco  Railroad  and  Power 
Co.                                          _  _      _  _           

90,000 

1,208  36 

1.3426 

Stockton  Electric  Railroad  Co. 

875,000 

10,732  40 

1.2265 

Stockton  Terminal  and  Eastern  Railroad 
Co. 

100,000 

1,035  82 

1.0358 

—  17  — 

RAILROAD    AND   STREET    RAILWAY    COM  PAN  I  ES— Continued. 


Company 


Ratio, 
per  cent 


Sugar  Pine  Railway  Co $300,000  $2,761  48  0.920'5 

Sunset   Railway   Co 1,300,000  15,653  38  1.2041 

Tidewater  Southern  Railway  Co 330,000  4,377  78  1.3266 

Tonopah  and  Tidewater  Railroad  Co 1,504,000  18,097  58  j  1.2033 

Union    Traction   Co 250,000  3,196  98  1.2787 

United  Railroads  of  San  Francisco 29,700,000  419,939  24  \  1.4139 

Visalia  Electric  Railroad  Co 300,000  4,507  87  j  1.5026 

Western  Pacific  Railway  Co 8,064,000  154,514  18  !  1.9161 

Yosemite  Valley  Railroad  Co 1,827,000  23,21244  {  1.2705 

Yreka   Railroad   Co 67,000  1,109  66  |  1.6562 

Totals    .                                                             _  $519,620,000  $6,789,063' 34  1.3065 


*On  account  of  the  exposition  the  receipts  of  this  road  in  1915  were  three  times 
the  average  of  the  five  preceding  years.     Normally  the  tax  ratio  is  about  1.37  per  cent. 


—  18  — 


GAS   AND    ELECTRIC    COMPANIES. 

Stock  and  Bond  Valuation  of  Properties  in  California  and  Ratio  of  Taxes  Thereto. 
(Excluding  certain  companies  to  which  that  method  of  valuation  can  not  be  applied.) 


Company 


Value 


Tax 


Eatio. 
per  cent 


Alta  District  Gas  Co $26,800  $362  66  1.3532 

Alturas  Electric  Power  Co 73,000  767  26  1.0510 

Amador  Electric  Light  and  Power  Co 137,000  I  1,851  92  1.3517 

Bishop  Light  and  Power  Co 48,000  !  7(14  44  l,ir>75 

California  Natural  Gas  Co.___ 1,005,000  12,427  14  1.2365 

California  Telephone  and  Light  Co.  (elec- 
tric  division)    354,li(;0  3,816  08  1.0780 

Calistoga    Electric    Co 42,000  483  14  1.1503 

Central  California  Gas  Co 486,000  :  4,457  2S  C.9171 

Central  Natural  Gas  Co 26, Ou)  311  60  1.1984 

Citrus  Belt  Gas  Co 398,000  5,986  60  3.5041 

Coachella    Valley    Ice     and    Electric    Co. 

(electric  division)   28,000  370  56  1.3234 

Coast  Counties  Gas  and  Electric  Co 1,690.000  17,598  66  1.0411 

Coast  Valleys  Gas  and  Electric  Co 870.01  in  10,655  24  1.2247 

Corona  Gas  and  Electric  Light  Co 96,000  1,279  44  1.3327 

Economic  Gas  Co 570<:oii  9,433  08  l.(5:>4!) 

Fort  Bragg  Electric   Co 100,0:  u  l,4r.:  1.4601 

Fowler  Gas   Corporation 15,000  i  184  ttfi  1.2380 

Great  Western  Power  Co 16,887,000  183,578  58  1.0869 

Half  Moon  Bay  Light  and  Power  Co 66.1  824  72  1.2496 

Hanford  Gas  and  Power  Co 77,l,ou  1,298  96  1.6869 

Hemet-San  Jacinto  Gas  Co.__— 45,000  >  26  1.1783 

H.  G.  Lacey  Co.  (electric  division) 300,000  4,273  72  1.4244 

Holton    Power    Co 675;on!i  10,114  1:1  1.4985 

Imperial  Valley  Gas  Co 190.i  2,218  34  1.1675 

Lassen   Electric  Co '  40,OCO  !  685  99  1.7148 

Lompoc  Light  and  Power  Co j  56,COO  653  48  ]  1.1669 

Long  Beach  Consolidated  Gas  Co 950,000  12,757  20  |  1.3428 

Los  Angeles  Gas  and  Electric  Corporation  17,630,000  224,114  86  1.2355 

Madera  Gas  Co 35,000  540  68  1.5448 

Mendocino  Electric  Co 25,000  297  60  1.1904 

Middle  Yuba  Hydroelectric  Power  Co 90,000  1,089  56  1.2106 

Midland    Counties    Public    Service    Corpo- 
ration   800,000  10,187  40  !  1.2734 

Midway  Gas  Co •  1,500,000  21,897  94  |  1.4598 

Modesto  Gas,  Light,  Coal  and  Coke  Co 162,000  2,201  20  I  "1.3587 

Mt.  Konocti  Light  and  Power  Co 70,000  799  33  j     '    1.1419 

Mt.  Whitney  Power  and  Electric  Co.* 3,470,000  43,947  68  i  1.2665 

Napa  Valley  Electric  Co 96,000  1,366  28  1.4232 

Needles    Gas     and    Electric    Co.     (electric 

division) 131,000  1,764  95  1.2732 

Northern  California  Power  Co.,  Cons 3,700,000  37,301  50  1.0081 

Oakdale    Gas    Co 50,000  572  12  1.1442 

Oceanside  Electric  and  Gas  Co 27,000  372  92  1.3811 

Ontario  Power  Co 465,000  5,261  38  1.1315 

Ontario-Upland  Gas  Co 115,000  I  1,598  78  1.3902 

Oro  Electric  Corporation 611,000  7,107  68  1.1633 

Oro  Water,  Light  and  Power  Co 200,000  3,420  38"  1.7102 

Pacific  Gas  and  Electric  Co 91,040,000  i  934,094  86  |  1.0265 

Pacific  Light  and  Power  Corporation 15,650,000  154,370  40  i  0.9864 

Palo  Alto  Gas   Co 208,000  i  2,816  30  1.3532 

Rialto  Light,  Power  and  Water  Co 27,500  388  08  1.4112 

Sacramento   Gas   Co '  500,000  i  6,622  68  1.3245 

San  Diego  Consolidated  Gas  and  Electric  | 

Co.  6,717,000  !  80,762  56  1.2023 


—  19  — 


GAS  AND   ELECTRIC   COMPAN  I  ES— Continued. 


Company 

Value 

*           Tax 

Ratio, 
per  cent 

Sar>  -loaquin  Light  and  Power  Co.t__ 

$7,862,000 

$91,691  96 

1.1663 

Santa  Harhara  Gas  mid  Electric  Co 

1  363  000 

16867  50 

1  2375 

Santa  Maria  Gas  and  Power  Co.      _        _    

189,000 

2,473  44 

1.3087 

Sierra  and  San  Francisco  Power  Co. 

6,225,000 

64,018  24 

1.C284 

Snow  \Iountain  \Vater  and  Power  Co 

600000 

7  068  20 

1  1780 

Southern  California  Edison  Co. 

25,174,000 

248,295  00 

0.9863 

Southern   California   Gas  Co. 

3,250,000 

46,307  22 

1.4248 

Southern  Counties  Gas  Co.  of  California.. 
Southern   Sierras   Power  Co.t 

1,020,000 
2,178,000 

12,662  46 
27.464  18 

1.2414 
1.2610 

Truckee  Electric  Light  and  Power  Co. 

45,000 

534  78 

1.1884 

Tuoluinne   Transmission   Co. 

25,000 

361  04 

1.4441 

Turlock  Gas  Co.                           _  _ 

51,000 

723  04 

1.4177 

Tkiah   Gas   Co. 

45,000 

515  48 

1.1455 

United  Light    Fuel  and  Power  Co. 

220,000 

2,744  14 

1.2473 

Universal  Electric  and  Gas  Co. 

500,000 

6,659  76 

1.3319 

Yallejo  Electric  Light  and  Power  Co. 

320,000 

4,352  30 

1.3601 

Ventura   County  Power  Co. 

773,000 

10,381  68 

1.3430 

\Veave''vi!]e    Electric    Co. 

22,000 

2,50  58 

1.1390 

We^t   Coast  Gas  Co 

120,000 

1,447  50 

1.2062 

Western  States  Gas  and  Electric  Co. 

6,350,000 

61,792  76 

0.9731 

Totals        -_                _  _             

^224.^02,300 

$2,438,576  64 

1.0838 

"Includes  Tulare  County  Power  Company. 

vim-ludes  Bakersfield  and  Kern  Electric  Railway. 

^Includes  California  business  of  the  Nevada-California  Power  Company 


20 


TELEPHONE  AND  TELEGRAPH  COMPANIES. 

Stock  and  Bond  Valuafyon  of  Properties  in   California  and  Ratio  of  Taxes  Thereto. 
(Excluding-  certain  companies  to  which  that  method  of  valuation  can  not  be  applied.) 


Company 


Value 


Ratio, 
per  cent 


Calaveras  Telephone  Co $8,000'  $99  66  1.2457 

California  Telephone  and  Light  Co.  (tele- 
phone division)  220,000  2,255  18  1.0250 

Central  Telephone  Co 15,000  180  04  1.2000 

Chetco  Southern  Telephone  Co 5,000  72  78  1.4556 

Coachella  Valley  Home  Telephone  and 

Telegraph  Co.  10,000  |  135  20  1.3520 

Colfax  Telephone  Exchange 7,700  \  86  40  .1221 

Colusa  County  Telephone  Co 90,C()(i  1,307  16  .4524 

Consolidated  Utilities  Co 58,40!)  718  36  .2300 

Corona  Union  Telephone  and  Telegraph  Co.  58,000  I  666  46  .1490 

Del  Norte  Peoples  Telephone  Co 18,000  253  .T>  .4086 

Dos  Palos  Telephone  Co 10,000  138  1(5  .3816 

Downey  Home  Telephone  and  Telegraph  C<..  40,000  57872;  1.4468 
Ducor-California  Hot  Springs  Telephone 

and  Telegraph  Co 4,500  64  20  1.4266 

Eel  River  and  Southern  Telephone  Co 25,000  357  02  1.4280 

Empire  Telephone  Co 3,000  42  12  !  1.4040 

Fowler  Independent  Telephone  Co 27,700  329  48  1.1894 

Gilroy  Telephone  Co 33,700  393  Nil  1.1685 

Glenn  County  Telephone  Co.  (The) 50,000  633  30  1.2666 

Guglielmetti  Rural  Telephone  Co 6,000  69  36  1.1560 

Happy  Valley  Telephone  Co 2,400  31  12  1.2966 

Herbert  Bass  Telephone  Co 6,400  88  32  1.3800 

Home  Telephone  and  Telegraph  Co.  (Los 

Angeles)  ;  5,943,000  !  90,340  28  1.5201 

Home  Telephone.  Company  of  Covina !  151,000  j  1,755  10  1.1622 

Home  Telephone  and  Telegraph  Company 

of  Pasadena  1,025,000  12,998  10  1.2681 

Home  Telephone  and  Telegraph  Company 

of  Santa  Barbara 428,000  5,116  70  1.1955 

Imperial  Telephone  Co 167,000  j  2,798  66  1.6758 

Interstate  Telegraph  Co 87,700  j  1,070  42  1.2199 

Kerman  Telephone  Co 8,400  117  28  1.3961 

Kern  Mutual  Telephone  Co . 170,000  2,333  18  1.3723 

Lindsay  Home  Telephone  and  Telegraph 

Co.  25,000  354  94  1.4197 

Los  Gatos  Telephone  Co 42,000  585  72  1.3928 

Lost  Hills  Telephone  and  Telegraph  Co.___  11,000  129  12  1.1738 
Marconi  Wireless  Telegraph  Company  of 

America 25,800  j  328  88  1.2747 

Monrovia  Telephone  and  Telegraph  Co 72,000  i  1,002  10  1.3918 

Nevada,  California  and  Oregon  Telephone 

and  Telegraph  Co 82,000  1,005  18  1.2258 

New  Freeport  Telephone  and  Telegraph  Co.  !  72,000  1,011  36  1.4046 
Northern  Trinity  Telephone  and  Telegraph 

Co.  2,000  :  24  94  1.2470 

Ontario  and  Upland  Telephone  Co 140,000  1,818  90  „  1.2991 

Oxnard  Home  Telephone  Co 75,000  ,  893  56  "  1.1914 

The  Pacific  Telephone  and  Telegraph  Co.__  45,980,000  j  633,294  60  1.3767 

Placer  County  Telephone  Co 5,OCO  \  67  18  1  1.3434 

Pomona  Valley  Telephone  and  Telegraph 

Union 200,000  3,192  86  1.5964 

Redondo  Home  Telephone  Co 26,000  321  94  1.2382 

Reedley  Telephone  Co 22,000  337  74  1.5351 

Riverside  Home  Telephone  and  Telegraph 

Co.  _  82,000  i  1,052  30  1.2833 


—  21  — 

TELEPHONE    AND   TELEGRAPH    COMPANI FS— Continued. 


Company 

Value 

Tax 

Ratio, 
per  cent 

Roseville  Telephone  Co. 

$29,500 

$398  20 

1  3498 

San  Antonio  Home  Telephone  Co.  _  _- 

3,450 

47  40 

1.3739 

San  Diego  Home  Telephone  Co. 

370,000 

5564  64 

1  5039 

San  Fernando  Telephone  and  Telegraph  Co. 
San  Fernando  Valley  Home  Telephone  Co. 
Santa  Monica  Bay  Home  Telephone  Co. 

26,000 
59,000 
166,500 

365  44 
720  92 
2,212  22 

1.4055 
1.2219 
13281 

Santa  Paula  Home  Telephone  Co.         _  „  _ 

40,000 

539  94 

1.3498 

Sierra  Madre  Telephone  and  Telegraph  Co. 
The  Siskivou  Telephone  Co. 

26,000 
19000 

382  32 
260  26 

1.4704 
13684 

Smeltzer  Home   Telephone   and  Telegraph 
Co 

21000 

236  94 

1  1282 

Southwestern  Home  Telephone  Co. 

300000 

3583  16 

1  1944 

The    Tulare    Home    Telephone    and    Tele- 
graph Co.    

48,000 

766  98 

1.5978 

Union     Home    Telephone     and    Telegraph 
Corporation      __      _      _    __  _    __ 

538,000 

7,074  26 

1.3149 

United    States    Long    Distance    Telephone 
and   Telegraph   Co 

1160000 

14023  18 

1  2089 

Valley  Telephone  Co 

19600 

256  70 

1  3097 

The  Western  Union  Telegraph  Co. 

2,212,000 

39,904  60 

18040 

Whittier   Home   Telephone   and  Telegraph 
Co. 

127,000 

1,891  04 

14890 

Willits  Telephone  and  Telegraph  Co. 

8,500 

111  28 

13091 

Totals 

$60,714,250 

$848,790  92 

13983 

EXPRESS   COMPANIES. 

Stock  and  Bond  Valuation  of  Properties  in  California  and  Ratio  of  Taxes  Thereto. 
(Excluding-  certain  companies  to  which  that  method  of  valuation  can  not  be  applied.) 


Company 

Value 

Tax 

Ratio, 
per  cent 

American   Express   Co.__  _    __ 

$132,000 

$3,012  84 

2.2824 

Wells  Fargo  &  Co. 

4  140'  000 

80  941  44 

1  9550 

Totals 

$4  272  000 

$83  954  28 

1  9652 

CAR   COMPANIES. 

Stock  and  Bond  Valuation  of  Properties  in  California  and  Ratio  of  Taxes  Thereto. 
(Excluding-  certain  companies  to  which  that  method  of  valuation  can  not  be  applied.) 


Company 

Value 

Tax 

Ratio, 
per  cent 

Pacific  Fruit  Express    __    __ 

$1  825  000 

$29  352  80 

16090 

Pullman  Company  

9  840  000 

121  942  22 

12392 

Totals 

$11  665  000 

$151  295  02 

1  2970 

^  BERKELEY  LIBRARIES 

CDES3fllE5fl 


THE  UNIVERSITY  OF  CALIFORNIA  LIBRARY 


